Energy Group: Natural-Gas Use May Increase 50% in ‘Golden Age’

Global natural-gas use may rise more than 50 percent by 2035 from last year to overtake coal as the second-most used fuel, the International Energy Agency said.

While a surge in gas use will improve air quality in many cities, cut coal use and lower energy costs, climate-change targets would be missed and temperatures would rise beyond a goal of 2 degrees Celsius (3.6 Fahrenheit), the Paris-based organization said today in a report.

“We have seen remarkable developments in natural-gas markets in recent months,” Nobuo Tanaka, executive director of the Paris-based adviser to developed nations, said in the report, titled “Are We Entering a Golden Age of Gas?”

The new assumptions for increased gas use are based on growing demand for the fuel in China, slowing growth of nuclear power, increased production of gas from so-called unconventional sources including shale, lower gas prices and rising use in transport, the IEA said. Unconventional gas would account for 40 percent of the 1.8 trillion cubic meters gain in consumption.

“There is a strong potential for gas to take on a larger role,” Tanaka said.

Chinese gas demand, now about 100 billion cubic meters a year and roughly equal to Germany, may soar to match that of the 27-nation European Union by 2035, according to the report. China has 16 of the 20 most polluted cities in the world, Fatih Birol, the IEA’s chief economist, told reporters in London.

‘Much More Liveable’

“Cities will be much more liveable,” he said. “We see a substantial drop in all pollutants.”

Demand for the cleanest-burning fossil fuel may rise to 5.1 trillion cubic meters a year by 2035, the agency said. That’s 600 billion cubic meters more than in the agency’s annual World Energy Outlook last year under a base scenario.

Gas will overtake coal as the most popular fuel after oil, with its share of the energy mix climbing to 25 percent from 21 percent, according to the IEA.

A greater role for gas in the global energy mix may mean world temperatures rise by 3.5 degrees Celsius, Birol said.

“This gas scenario does not keep us to a 2-degree Celsius trajectory that we would like to see,” Birol said.

The IEA cut its price outlook by about 20 percent from last year due to the greater availability of gas from shale and other deposits. Gas prices are now about $1.5 to $2.5 a million British thermal units lower than in the IEA’s base case, the New Policies Scenario, Birol said.

Global natural-gas use may rise more than 50 percent by 2035 from last year to overtake coal as the second-most used fuel, the International Energy Agency said.
While a surge in gas use will improve air quality in many cities, cut coal use and lower energy costs,...